Asian stocks mixed as China’s Communist Party meeting approaches

Asian markets were mixed on Tuesday as optimism continued to dominate, with upbeat economic data coming out from China and Japan and as traders awaited further earnings.

Australia ASX +40.90 +0.69% 5,958.10 CLOSED

Shanghai Comp -6.43 -0.19% 3,372.04 CLOSED

Hang Seng Index -6.54 -0.02% 28,686.26 OPEN

Nikkei 225 +80.56 +0.38% 21,336.12 CLOSED

TSEC 50 Index -51.06 -0.47% 10,723.15 CLOSED

Earlier in the session, traders counted on meeting minutes from the Reserve Bank of Australia. The document exposed household debt levels are high and need to be monitored. In September, the central bank opted to keep interest rates steady at a record low 1.5 percent.

On the data front, investors digested Monday’s economic reports, including a 2.0 percent increase in Japan’s industrial production for August. The growth was 0.1 percent short from expectations, but still represented a solid advance for the Asian nation.

Inflation data in China cheered market participants, exposing a 0.5 percent month-to-month build in consumer prices and a 6.9 percent for producer prices in annual terms. Both indexes outperformed estimated values of 0.4 percent and 6.3 percent respectively.

Attention in China is now directed to the opening of the 19th Communist Party Conference on Wednesday. Top leaders of the Communist Party will gather in Beijing for the crucial five-year revision that could further strengthen President Xi Jinping's position as president.

This gathering is relevant as it will allow the Chinese leader to define his political agenda for next five years. A key thing to watch is the party’s position on cryptocurrencies.

Third-quarter earnings in the United States are also contributing to optimism. Wall Street’s top three benchmarks once again closed at record highs following better-than-expected figures.

The Dow Jones Industrial Average ended at 22,956. The S&P 500 closed with a 0.17 percent gain and the Nasdaq Composite added 0.28 percent to finish at 6624.

The political sphere provided interesting news in the last few hours. According to sources cited by CNBC, US President Donald Trump will be interviewing Janet Yellen on Thursday about potentially extending her time as chair of the Federal Reserve.

Yellen’s term is due on February. She was appointed by former President Barack Obama in 2014 and ever since, she has proved to be a very pro monetary adjustment leader.

If Trump asks Yellen to stay for another term as the country's head of regulator, it will represent a major change on his approach and previous remarks concerning Yellen.

Fort Financial Services